On No-Ads Netflix, “Bling Empire” Shows a Path for Luxury Brands
Plus: The celebrity cannabis connection, TikTok's Chinese makeover, and Bieb my Valentine.
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A hallmark of Netflix is its complete lack of advertisements in the traditional sense — the service is supported entirely by paid subscribers, and there are no tiers that include interruptive ads. Last September, CEO Reed Hastings told Variety, “It’s definitely not a rule. It’s a judgement call…It’s a belief we can build a better business, a more valuable business.” That means avoiding commercial breaks and other explicit forms of advertising that might interfere with viewers’ enjoyment of the movies and shows they signed up for, a decision that has endured despite Netflix’s immense debt, which added up to some $16 billion since 2011.
Yet it’s working: last month Netflix announced that it expects to be cash-flow positive after 2021 and will no longer have to borrow to support its expensive content production and acquisition plans. But while brands are seen on Netflix shows, no ad money actually trades hands with Netflix itself.
From Coca-Cola and Kellogg’s Eggo waffles both releasing branded products through deals with Netflix’s sci-fi series “Stranger Things” to Subway’s “Say It With A Sub” campaign referencing its role in the on-screen adaptation of “To All The Boys I Loved Before,” seamless brand integration enables cross-promotional marketing in a mutually supportive fashion — An act of you scratch my back and I’ll scratch yours.
In terms of product placement, Hollywood Branded’s CEO Stacy Jones, who has worked on brand deals with multiple Netflix shows, including Lacoste and Queer Eye, BlackBerry and House of Cards, Ralph Lauren, and Edit, among dozens of others, told Content Commerce Insider, “The cash from these transactions [between production and brands] is typically not pocketed by someone, it is instead re-invested in the film or series to make that content better.” It’s similar to how many productions in China operate, with brands serving as underwriters.
An over-the-top brand presence is strong on one of Netflix’s most recent hits. “Bling Empire” — a reality show version of “Crazy Rich Asians” — is brimming with luxury namedrops and product close-ups. The majority of the cast members are of Chinese descent, and, though not officially available in the country, the show has drawn attention from viewers based in China, which is set to become the world’s largest market for luxury by 2025.
That leads to the question of how those brands came to land their supporting roles on the series. Is their appearance a not-so-subtle effort at cross-promotional luxury marketing, or straight-up product placement facilitated by the production company?
“Bling Empire” was created by Jeff Jenkins Productions, the company behind the Kardashian reality-TV empire, including “Keeping Up With the Kardashians” and its many spin-offs. Those shows have been called out over somewhat shameless product placement, such as when Kanye West plugged his Adidas Ultra Boost sneakers in an episode of “I Am Cait.” The wealthy Asian cast members of “Bling Empire” frequently mention high-end brands such as Fendi, Louis Vuitton, Dior, and Piaget, sometimes turning them into plot points or discussing items in great detail as if they were trying to sell them to viewers, QVC-style.
Darryl Collis, director of the U.K. product placement agency SeeSaw Media, said that these references are not linked to commercial deals. “The cast wants to be seen with Lamborghini, Hermès, Gucci, and Rolls-Royces because it’s their lifestyle,” he said. “I would question whether there is any product placement at all on ‘Bling Empire,’” noting how the stars’ on-screen behavior does not necessarily align with the tasteful brand identities of those high-end labels.
Hollywood Branded’s Jones agrees. “Luxury brands resist participating in the unknown,” she said. “But this may change in upcoming seasons,” given the show’s massive popularity — It immediately began trending upon its debut on January 15, and has amassed more than 34 million views along with thousands of mentions on social media. “We will likely see high interest from newer brands in the luxury space that are not typically the first to be called out naturally, wanting to become part of the story,” said Jones.
Due to Netflix’s ad-free policy, the platform itself is unlikely to get involved in on-screen promotion of brands in the future, but the production companies that it commissions for content are free to negotiate deals for seamless product placements and brand integrations.
Product placement has become an increasingly popular marketing strategy that works well with a streaming culture devoid of ad breaks. It’s also appealing for brands that want to reach global audiences via content, according to Collis, as shows on Netflix, Apple, and Amazon can be offered in 100-plus countries around the world
“When the pandemic hit, we didn’t know what would happen but we’ve seen a rise since May/June in product placement requests,” Collis said. “We’re already up 60% in enquiries this year, and those enquiries are not only from small brands but now more key major brands too.”
Research by PQ Media states that global product placement revenues are expected to resume double-digit growth in 2021, with streaming entertainment favoring brand integrations and product placements. Gen Z audiences consume most of their video content via Netflix (35%) and YouTube (37%), where there are either no commercial breaks or they can be skipped.
We’re also seeing the trend of products going viral and selling out thanks to shorter video content such as on TikTok, a trend that could easily be replicated through product placement in movies and shows, with the next logical step for streaming platforms being the creation of seamless paths to purchase via e-commerce integration — but given Netflix’s reluctance to engage in overt commerce, it’s a move that the platform would be more likely to pass on.
- by Sadie Bargeron
Mentioned in today’s newsletter: Adidas, Anheuser-Busch, Altria, Amazon, Apple, Dior, Facebook, Fendi, Gucci, Hermès, Instagram, Lamborghini, Louis Vuitton, M Missoni, Netflix, Piaget, QVC, Rolls-Royce, Shaboink, Snapchat, TikTok, Twitch, Uncle Bud’s Hemp, YouTube.
CollaBrands: The Buzz on the Cannabis Connection
In this week’s column, we look at the opportunities for brand collaborations with the cannabis industry, which is seeing significant growth.
In 2020, the coronavirus pandemic and the Democratic victory in the November presidential election fueled a “green wave” for marijuana legalization in the United States. Currently, 15 states have adopted laws allowing for recreational marijuana use of cannabis, while 36 others permit medical use. A decade ago, recreational use was illegal in all 50 states, but this year, three more U.S. states — New York, Connecticut, and Virginia — are most likely to legalize it.
The Wave of Legalization?
Several economic and social factors are also driving a push towards federal legalization. From an economic perspective, Covid-19 has created economic circumstances similar to the Great Depression, with millions of jobs lost and thousands of small businesses facing bankruptcy. For state governments, these business and job losses translate to billions of dollars in lost tax revenue.
Nearly ninety years ago, during the height of the Great Depression, the U.S. government overturned the 18th Amendment and its ban on the sale and consumption of alcohol, ending the 13-year-long Prohibition. The legalization of alcohol in 1933 brought back a significant source of tax revenue. In a similar fashion, the legalization and taxing of cannabis can create new taxes for states.
A Gallup poll conducted in 2020 found that 68% of respondents favored legalization of marijuana, a record high. The combination of public support, states’ needs for revenues, and significant investments by major consumer products firms — from Altria (big tobacco) to Anheuser-Busch (alcoholic beverages) to Scotts Miracle Grow (gardening and lawn care), together with the Democrats’ control of Congress, could set the stage for federal legalization by 2022.
Meanwhile, BDS Analytics estimates that global spending on legal cannabis products will hit $57 billion by 2025.
Critically, once the federal government legalizes the use of cannabis, brands will have a much easier time with financial regulation as well as interstate commerce concerns.
What Are the Co-Branding Opportunities?
By its very nature, cannabis is a natural for lifestyle branding. Cannabis consumption can be a very personal and emotionally connected ritual that lends itself to partnerships with strong and trusted consumer brands.
The Early Adopters
Let us look at some of the early adopters of cannabis branding. Certainly, for mainstream luxury consumers, M Missoni’s entry into the cannabis business was an eye-opener. In 2020, The Italian fashion house partnered with Los Angeles-based cannabis brand Pure Beauty to debut custom cannabis cigarettes. This psychoactive THC product is the first of its kind to be promoted by a luxury fashion brand.
The Celebrity Sell
We know from Instagram, TikTok, and every other form of mass media that celebrity sells. Celebrities who have been vocal about their use of cannabis and its positive effects on their creativity and careers have had a strong influence on the branding of cannabis. For example:
Back in 2015, Snoop Dogg was one of the first celebrities to jump into branded cannabis.
Willie Nelson was another with his Willie’s Reserve brand:
See also the estate of Bob Marley:
And Post Malone’s Shaboink brand:
Magic Johnson’s partnership with Uncle Bud’s Hemp:
Why Cannabis Brand Collaborations Will Be a Hit
In a recent interview with Forbes, Roy Bingham, chairman of cannabis market research firm BDS Analytics, noted that,
We don't have the Starbucks of cannabis yet; but we do have multistate operators and companies like Curaleaf that have done more than $100 million in sales in the last quarter. Consumers do like to have a consistent experience that is familiar and in which they do have confidence. The same thing is happening with brands. Consumers do tend to prefer brands that are widely familiar and do a good job in marketing. We will see the first national brands (those sold in ten states or more) in 2021. That's a new phenomenon and part of the new growth in the industry.
Clearly, with national brands just beginning to flower, it’s high time for more co-branding and collaborations.
With Trump Gone, TikTok Could Get a Chinese Makeover in 2021
by Avery Booker
Having weathered a crusade by former President Trump to force the sale of TikTok’s U.S. operations to a consortium led by Oracle and Walmart (a deal that looks like it will be shelved for the foreseeable future), Bytedance appears to have a green light to make TikTok feel a lot more like Douyin, its Chinese counterpart.
Bytedance isn’t out of the weeds quite yet — the Wall Street Journal reported on the Biden administration’s plans to review whether the national security threat cited by the previous administration is significant enough to warrant a ban or other measures. But it appears that TikTok will continue to operate relatively unfettered (for the near term at least), presenting less of a concern for brands struggling to decide how to invest marketing budgets in the platform this year.
With the tentative go-ahead to proceed with business as usual, TikTok is ready to become a lot more full-featured. Having already expanded Douyin functions like sponsored challenges on TikTok over the course of 2020, Bytedance has moved on to introduce new affiliate marketing features for brands in 2021, which would allow more social commerce integration by letting video creators link to products, whether or not the content is sponsored. The company will also allow brands to showcase products on the app and boost e-commerce livestreaming — which TikTok teased late last year in a holiday collaboration with Walmart.
E-commerce livestreaming seems to have the most potential, particularly among Gen Z consumers, who generally have more free time available to spend watching content from influencers. And although competition is already fierce, with Facebook, Instagram, Snapchat, Twitch, and numerous other platforms vying for attention, TikTok has an advantage that can help it tap into the potential of the format on a global scale. “Culturally, TikTok is well placed for livestreamed commerce to capture the dissolving distinction between content and commerce because it doesn’t feel as polished as other platforms,” Jack Smyth, creative technology officer at WPP’s Mindshare, told the Financial Times.
A key point here is that e-commerce livestreaming (like many other features gradually being woven into TikTok) has long been available on Douyin, which is now moving to own the full content-commerce loop, from talent brokerage to Douyin Shops to payments. As such, the Chinese version of TikTok can serve as a sort of crystal ball, showing what Bytedance’s international ambitions for TikTok could entail (assuming of course, that governments don’t get in the way).
One addition that Bytedance could make on TikTok would be something akin to its “Star Map” influencer matchmaking service, which would help brands identify and connect with TikTokers for marketing campaigns. If Bytedance were to make Star Map a global feature, the company could diversify its revenue stream while undercutting the innumerable TikTok influencer marketing agencies that have cropped up in recent years.
Read the full story on Content Commerce Insider.
TikTok Take
Bieb my Valentine. On February 14, Justin Bieber will play TikTok’s first-ever full-length concert by a single artist, performing songs from his 2013 album “Journals.”
Expanded alliance with Universal Music Group. TikTok announced a global agreement with UMG, expanding on their existing agreement and pledging to form new experiences with deeper bonds between fans and the artists they love (like Justin Bieber).
TikTok is letting down its Black creators. NBC looked at the state of TikTok eight months after the platform issued a public apology for censoring and suppressing Black creators. Despite its efforts including bringing in more Black advisers and virtual meetings with Black creators, the platform is still falling short.
Lingerie brand Adore Me calls out TikTok. In a series of posts on Twitter, the company wrote that it “has regularly seen the removal of our content on TikTok that features plus-size, Black, and/or differently abled models and women of color.” Read more on Quartz.
Instagram will no longer promote Reels that were originally TikToks. Six months after launching its short video competitor Reels, Instagram will no longer promote content that displays a TikTok watermark. The move is intended to encourage fresh content instead of reposts that advertise the more popular Bytedance-owned platform.
TikTok pulls ahead in moderating harmful content. According to IPG Mediabrands Media Responsibility Index, Facebook, Twitter, and YouTube all lagged behind TikTok and Reddit when it came to content moderation in areas such as hate speech and misinformation [The Drum].
TikTok’s latest trends report. The platform shared lists of 2020’s most popular and fastest-growing content categories for 19 markets around the world, including the United States, South Korea, the United Kingdom, and Saudi Arabia.
Global News
Chief Entertainment Officers: The rapid growth of partnerships between the realms of content, commerce, and technology means that brands need to get dedicated leaders to focus on these initiatives. Adweek
Facebook has started work on an audio chat app to rival the red-hot Clubhouse, its latest attempt to get in on new technology that appeals to younger users. New York Times
China’s success at developing viable models for social commerce offers critical lessons for global brands struggling with declining traffic and high customer acquisition costs. Digital Commerce 360
Rihanna and LVMH are hitting the pause button on the singer’s luxury fashion label, while her Savage x Fenty lingerie line secured more than $100 million in funding from the LVMH-backed private equity firm L Catterton. WWD
New York Fashion Week kicks off on February 14, bringing it head-to-head with Lunar New Year celebrations in China, where more premium brands are focusing their attention. The Guardian
Budweiser’s decision to skip the Super Bowl advertising frenzy scored it a win: The brand film it produced to explain why it was opting out proved to be more effective than its recent commercials for the big game. Unruly
And on the other end of the spectrum, Reddit’s five-second spot during the Super Bowl was championed for turning expectations upside down with its creative use of static text. New York Times
Love it or hate it, you can also purchase and wear your take on Oatly’s Super Bowl commercial. Business Insider
One of the most talked-about Super Bowl ads, Jeep’s Bruce Springsteen spot, highlights the ever-present risks of relying on celebrity endorsements: The automaker was forced to pull the two-minute commercial after the singer’s November DWI arrest was made public. CNBC